RBI to sell Punjab Governments Rs 350 Cr ten year bonds

Mumbai: Punjab government has announced sale of 10-year State Development Loan (SDL) for an aggregate amount of Rs 350 crore (face value) through yield based auction using multiple price auction method.

The auction will be conducted by the Reserve Bank of India (RBI) at Mumbai on December 13, 2011.

The government stock upto 10 per cent of the notified amount of the sale of the stock would be allotted to eligible individuals and institutions subject to a maximum limit of one per cent of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility, stated and Reserve Bank of India release.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Negotiated Dealing System .

The Reserve Bank of India will determine the maximum yield at which bids will be accepted. Securities will be issued for a minimum nominal amount of Rs 10,000/- and multiples of Rs 10,000 thereafter, the release mentioned.

The results of the auction will be announced during banking hours on December 14, 2011.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on June 14 and December 14 of each year till maturity.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility, the RBI release clarified.

Source: RBI

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